A font server is a net service that provides a set of X11 fonts with a simple protocol. It can be queried which fonts it provides and will supply the font bitmap data on request.
You might want to use a font server to provide the X server with a modified cursor font, instead of telling it where to find the font on the file system.
This method is especially handy if you use several machines that don't share a common file system or if you use X terminals that support the font server protocol.
A font server program and associated tools comes with the X11R5+ distribution (AFAIK).
Read the manual pages fs(1), fslsfonts(1) (or xfs(1), xfslsfonts(1) under X11R6) and try it—it isn't hard. Say, you are running the server on host some.host.edu on port 7100. You can test the setup with the command
fslsfonts -server some.host.edu:7100
To actually use the server issue the command
xset +fp tcp/some.host.edu:7100
which should return without an error message.
If you have set up a font server simply use fstobdf which comes with the font server.
Alternatively you may try getbdf which can dump any installed X11 font to a bdf file.